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August 12, 2011

Fundamentals 8/12: Schizophrenic Consumer Data

August 12, 2011

Fundamentals 8/12: Schizophrenic Consumer Data

Retail Sales: July’s Advance Estimates
-Month/Month change: +0.5%.
-Biggest rise in 4 months
-Excluding Autos Month/Month change: +0.5%
Full report

Univ. of Michigan Consumer Sentiment
-August Index 54.9 from 63.7 July
-This is a massive drop, lowest level since May 1980
-Index averaged 89 in the five years before recession that began Dec 2007.
Cunsumer Sentiment
What I see is schizophrenic data: sentiment is awful, Retail Sales are slightly up but the Consumer Metrics Index is sharply up. It is hard for the consumer to know what to do when the Dow moves up 500 one day and down 500 the next day. Uncertainly and market volatility reign. It is worth noting that the Consumer Metrics Index is a leading indicator and could well be a sign that consumer spending is about to pick up. That said, the S&P downgrade and the equity market volatility may have trashed the consumer’s intentions. We shall see. Here’s one more stat from today…

Business Inventories
-Month/Month +0.3% for June
-Prior was +1.0%.
-Yet another indication business was getting ahead of the consumer